How Slack Does Customer Retention Better Than Anyone Else

When it boils down to it, relationships are just loving personal versions of customer retention. Keep the other party happy, keep delivering on your end, be the best to the other person. Customer retention. Like any relationship, customer retention demands time, priority, loyalty and value.

If one looks at the sales funnel bringing customers on board is not rocket science nowadays, but keeping them surely is. 32% of executives say retaining existing customers is a priority (Forbes). Let me say it again: Only 32%.

Companies focus on acquisition more than customer retention, even though it can cost 7x more to acquire new customers whereas according to the Harvard Business School, increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent and Slack is one such company which understands and so is the leading one in its race.

If you search the dictionary meaning of Slack it means not held tight, but this SaaS company is leaving no ends loose to make their customers happy and retainable, making their competitors perplexed. They’ve made great use of customer retention techniques to keep their audience on-board.

Let’s see how they do this:

1. Taking utmost time to know their audience and create a need for their software

To have a retainable relation one needs to be correct from his very first step by choosing the right audience and Slacks did it right. They were customer-centric from square one and took their utmost time to know their audience and understand their needs.

Their software was targeted for the teams to improve their interpersonal communication.

“Somewhere between 20 to 30% of our users — and this is just an estimate — come from some other centralized group messaging system like HipChat, Campfire, or IRC.When we asked the other 70 to 80% what they were using for internal communication, they said, ‘Nothing.’But obviously, they were using something. They just weren’t thinking of this as a category of software.”says Mr. Stewart Butterfield, CEO, Slack.

The something was a very vague option like email, Facebook or Hangout groups.

It was important for Slack to make their customers realize that they needed a better software. So they did not sell it like “a group chat system”, as there were plenty. Instead, they offered “an organizational transformation”, which made it more relevant to buy. People realized that sorting their emails and groups into personal and professional was burdensome and this closed software offered all the professional information at one space without making it boring like email.

Even among different companies, Slack noticed that it worked well for the small and medium size as it came across as a “Freemium App”, features of a premium with the tag of free, exactly what the growing companies demand. The major difference between Slack and its competitors was that at zero cost, Slack offered all the features apt to fulfil more than just any SME’s necessities whereas its competitors had their basic features free but one had to buy to enjoy the premium ones. Thus, people recommended Slack even to others, bringing an organic growth.

Knowing is a two-way process and Slack does it perfectly. To understand their target audience better, they make sure that their audience knows them well. Successfully doing so removes all the barriers of confusion from customer’s end making it easy for the company to grab their needs.

Slack does it by organizing several conferences and event across the globe. Moreover, they publish a transparency report every year, which makes the customers clear of their upcoming strategy and plans. This not just clears the cloud of scepticism but also builds engagement, trust, and faith – necessary factors for retention.

2. Excellent Product

“[Some tactics] are just polluting the customer lifecycle. And then you wonder – why is no one having word of mouth growth? It’s because you’re pissing them off every step of the way.” says, Bill Macaitis, CMO, Slack.

And one of those trivial steps is the product itself. Everyone makes huge promises just to convert a stranger to a customer but it needs credibility to do what was promised. Fulfilling this makes your company their life savior.

Slack keeps this on their priority list and offers their customer a product like none.

People at Slack don’t believe in mediocrity and know the difference between good and great making your tool quotidian. Moreover, a strong product needs less marketing as the product speaks for itself.

Let’s see some of the unique features and how do they benefit Customers which in turn benefits Slacks:

Intuitive and Interactive design– The first thing that a customer sees is the first thing in our list. According to Andrew Wilkson, the guy behind the design of Slack, there are 3 reasons why the designs work best for Slack-It looks different, It feels different and it sounds different and we couldn’t disagree.

The basic reason why people no longer use IRC is because it was as boring as the traditional chat systems, so why buy it? Slack changed the norms and brought in a very simple but robust design keeping the users more than just sufficed. Their design looks more of video games than an enterprise collaboration product.

Channels and Direct messages– By default the channel that you use is Public. This is the place where the whole team can see and write archives, texts, and chats. But since there are various sub-teams, they can form different groups. But since it’s all public you can freely see what the other teams are up to.

But, sometimes some texts need to be among a specific set of people not meant to be seen by the others, maybe due to information confidentiality or you are planning your colleague’s surprise birthday party.

One can even send direct messages when he/she needs to talk one to one to an employee.

Great Integration-We always fuss to switch between 2 apps. Tedious work right? Well, Slack made it easy for you by integrating 3rd party applications. Their app makes retention simple with its design and function.

Slack integrates all the tools (including services such as Twitter, Google Docs, GitHub, Google Drive, Dropbox, Zendesk and many others) to get all your notifications and even cite all your external services within Slack itself and all this is searchable with just one search box.

This takes the burden of switching to other apps, off from their customers.

Searching–“Workers spend about 20 percent of their time looking for information, or looking for a person who has the information they need,” Weiss said. Noah Weiss, Slack’s head of search, learning and intelligence. Realizing its importance Slack, made searching, actually work and easy.

One can search archives, files, conversations, sort people from this tool without making much effort.

Available on different Platform-Forgot transferring your task presentation from your office computer? Don’t worry, Slack is omnipresent (Well, almost). All the chats, files, and updates are synchronized with the web, your desktop, and even your mobile.

The mobile app is simple and robust to use too and decreases your headache to carry your laptop everywhere.

It also has other features like file sharing, VOIP calls, and the latest-Messaging button tool. With all these features, Slack has revolutionized the way people perceived messaging app and so are engaged in it.

3. Feedback and Long-term Analyzing Metrics

It is quite normal for your software to face glitches and lack features but the way you deal with them is crucial for customer retention.

97% of consumers said they are somewhat likely to become more loyal to a company that implements their feedback (Apptentive)

At slack, people are good listeners and even better optimizers.

They take the feedback of their customers to the utmost importance and has been a priority since they started. Today, Twitter is increasingly a channel for customer feedback, and it was a game-changer for Slack.

They had made a hall of love page, wherein initially people used to write all their problems and Slack responded quickly and well to them. A recent example of this can be the day of 10 June when people using it were unable to connect.

Slack immediately used the platform of Twitter to admit their mistake and informed its user that it was due to failure for the API, or application programming interface. They apologized for such disruption and kept them updated. This helps by not getting customers hyped up and worry, thus increasing the brand image, credibility, and retention. This also inculcates transparency which users love about a company.

Following are the metrics that Slack use:

• First response time – When people complain, they don’t expect you to solve them the problem in the first stage itself but no response is not a good solution either. Customers want you to respond to their problems in a timely manner and failing to do so can make them shift to your competitors. This metric makes sure that it does not happen.

• NPS (Net promoter score)- It is used to gauge the loyalty that exists between a firm and their customers.

In this, the site asks you “How likely is it that you would recommend our company/product/service to a friend or colleague?”

The scores are mostly given from a 0 to 10 scale and according to this scale people are categorized as:

Promoters– Ones who respond with a score of 9-10 and they are the ones who are happy with the product and will not just remain retainable customers but also are likely to promote.

Passives- Ones who respond from 7-8, their behavior falls in middle of Promoters and our next category which is

Detractors– Ones who respond from 0-6. They are less likely to recommend the product to someone as they are themselves unsatisfied.

It is obvious that to have a better NPS one needs to have as many promoters as possible and least no. of Passives and Detractors.

• Customer Satisfaction-This is an old metric to keep in check that whether the customers are satisfied with the product. The customers scale their satisfaction from 0-10

• Daily active users -This helps in measuring the success of a product as success is directly proportional to activeness and engagement.

It helps to measure that how many and how well people have stuck with their product. Fun fact-Slack has 3 million (weekday) daily active users and 930,000 paid seats

Thus we see Taking feedback and measuring in terms of success has given Slack a unique positioning.

Conclusion

According to Kissmetrics, 63% of marketers feel that customer acquisition is the most important goal for advertising. That’s too large a number to not value it’s importance, and Slack is one example of a company doing it the right way. They’ve avoided the mistakes a digital business can make, while pursuing their users and knowing who they are. THey know that keeping users is just as important as getting new ones.

But Slack proves that new customer acquisition can be done easily if the pertaining ones recommend it and this is possible only by good customer support and quality product as this leads to the best of the user experience.

And their success? Maybe their CMO Bill Macaitis says it all in his Linkedin description,